Question 1

In the circular-flow diagram, which of the following is not a factor of production?

Accepted Answer

A)  labor
B)  land
C)  capital
D)  money

Question 2

Table 2-1
The following table contains some production possibilities for an economy for a given month. 
-Refer to Table 2-1. If the production possibilities frontier is bowed outward, then "?" could be

Accepted Answer

A)  400.
B)  450.
C)  600.
D)  750.

Question 3

Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

Accepted Answer

A)  similar opinions about the validity of economic theories
B)  significant differences in education
C)  differences in personal values
D)  a reliance on normative statement for research theories

Question 4

When income increases the slope of an individual's demand curve, the demand curve

Accepted Answer

A)  turns positive.
B)  becomes undefined.
C)  remains negative.
D)  becomes infinite.

Question 5

Figure 2-10
Panel (a) 
Panel (b)   
-Refer to Figure 2-10, Panel (a) . Production at point Y is

Accepted Answer

A)  impossible and inefficient.
B)  impossible but efficient.
C)  possible but inefficient.
D)  possible and efficient.

Question 6

The y-coordinate is the

Accepted Answer

A)  first number of an ordered pair and represents the point's horizontal location.
B)  second number of an ordered pair and represents the point's horizontal location.
C)  first number of an ordered pair and represents the point's vertical location.
D)  second number of an ordered pair and represents the point's vertical location.

Question 7

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 8

Figure 2-14  Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two.
-Refer to Figure 2-14. Which point(s) on the graph show unemployment of resources?

Accepted Answer

The answer of Figure 2-14  Consider the production possibilities...

Question 9

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

Accepted Answer

The answer of Like biologists and physicists, economists use the...

Question 10

Normative statements are

Accepted Answer

A)  prescriptive, whereas positive statements are descriptive.
B)  descriptive, whereas positive statements are prescriptive.
C)  backward-looking, whereas positive statements are forward-looking.
D)  forward-looking, whereas positive statements are backward-looking.

Question 11

The Council of Economic Advisers

Accepted Answer

A)  was created in 1776 and consists of three members and a staff of several dozen economists.
B)  was created in 1776 and consists of thirty members and a staff of a dozen economists.
C)  was created in 1946 and consists of three members and a staff of several dozen economists.
D)  was created in 1946 and consists of thirty members and a staff of a dozen economists.

Question 12

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Accepted Answer

A) True 
 B)False

Question 13

For economists, substitutes for laboratory experiments often come in the form of

Accepted Answer

A)  natural experiments offered by history.
B)  untested theories.
C)  "rules of thumb" and other such conveniences.
D)  reliance upon the wisdom of elders in the economics profession.

Question 14

The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Accepted Answer

A)  Transit ridership increased in Atlanta following an increase in gas prices.
B)  Federal tax revenue increased following a decrease in the tax rate.
C)  Students in a principles of microeconomics course are asked to play a game with classmates to determine what decisions they make under certain circumstances.
D)  Following the imposition of austerity measures, the growth rate of the economy in Greece slowed.

Question 16

Economists use one standard set of assumptions to answer all economic questions.

Accepted Answer

A) True 
 B)False

Question 17

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)  goods and services
B)  land, labor, and capital
C)  dollars spent on goods and services
D)  wages, rent, and profit

Question 18

Figure 2-3 
-Refer to Figure 2-3. What do the inner arrows represent in the figure?

Accepted Answer

flow of in...

Question 19

Economists view positive statements as

Accepted Answer

A)  affirmative, justifying existing economic policy.
B)  optimistic, putting the best possible interpretation on things.
C)  descriptive, making a claim about how the world is.
D)  prescriptive, making a claim about how the world ought to be.

Question 20

Figure 2-17​ 
-Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.

Accepted Answer

A) True 
 B)False

Exam 2: Thinking Like an Economist

Normative statements are

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Which of the following is one of the basic reasons why economists often appear to give conflicting advice to policymakers?

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The y-coordinate is the

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In the circular-flow diagram, which of the following is not a factor of production?

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Economists view positive statements as

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The slope of a horizontal line is infinite, and the slope of a vertical line is zero.

Correct AnswerverifiedShow Answer

Which of the following is not an example of a natural experiment an economist might use to evaluate a theory?

Correct AnswerverifiedShow Answer

The effects of foreign competition on the U.S. textile industry would be studied by a microeconomist rather than a macroeconomist.

Correct AnswerverifiedShow Answer

Figure 2-10 Panel (a) Panel (b) -Refer to Figure 2-10, Panel (a) . Production at point Y is

Correct AnswerverifiedShow Answer

Like biologists and physicists, economists use the dispassionate development and testing of how the world works known as the

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For economists, substitutes for laboratory experiments often come in the form of

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In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

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Figure 2-3 -Refer to Figure 2-3. What do the inner arrows represent in the figure?

Correct Answerverifiedflow of in...View AnswerShow Answer

Figure 2-14 Consider the production possibilities curve for a country that can produce sweaters, apples (in bushels), or a combination of the two. -Refer to Figure 2-14. Which point(s) on the graph show unemployment of resources?

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Table 2-1 The following table contains some production possibilities for an economy for a given month. -Refer to Table 2-1. If the production possibilities frontier is bowed outward, then "?" could be

Correct AnswerverifiedShow Answer

When income increases the slope of an individual's demand curve, the demand curve

Correct AnswerverifiedShow Answer

In the circular-flow diagram, firms own the factors of production and use them to produce goods and services.

Correct AnswerverifiedShow Answer

Figure 2-17​ -Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.

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Economists use one standard set of assumptions to answer all economic questions.

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The Council of Economic Advisers

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flow of in...
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Figure 2-17 -Refer to Figure 2-17. The opportunity cost of moving from point A to point B is zero.

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